The Legal Status and Limitations on Investor–State Arbitration in Africa

Abstract Chapter 3 critically analyses how investment treaty arbitration affects the exercise of judicial authority of the courts in Africa. Investor–state arbitration permits foreign investors to bypass municipal courts and thereby make foreign investors less accountable to the host state through established state institutions. Yet, African constitutions studied vest original, appellate, and final jurisdiction over legal disputes to municipal courts. The chapter establishes that foreign investors do not have an automatic and direct right in customary international law to access international dispute resolution. In this regard, the chapter challenges the capacity of African states to agree to investment treaty arbitration in light of national constitutions and customary international law. The principles of constitutional governance, especially on accountability of governments through the judiciary, transparency, rule of law, and the need to put citizens first prohibit an automatic, absolute substantive and procedural preferential treatment to foreign investors. The chapter makes a case for African states to reconsider the role of domestic courts and state-state dispute settlement mechanisms for both investment and trade disputes that are consistent with constitutional governance, the rule of law and democracy.